A Segmented Look at Consumer Banking Preferences

March 26, 2014

Modern marketers know that the best way to engage with consumers is through tailored and personal messaging strategies rather than broad-based one-size-fits-all approaches. To do so, marketers should make a concerted effort to identify customers before trying to reach them. In the banking realm, where engagement has historically taken place at teller counters, times are changing — and so are consumer banking preferences.

And to better understand those preferences, Nielsen has identified five segments of the U.S. population, each of which has distinct demographics, banking behaviors and service desires. This is key insight for financial institutions looking to identify, research and support these segments because the best way to reach one isn't necessarily the best way to reach them all.

There's no denying the influence that digital is having on our lives, and it should therefore come as little surprise that the Connected segment makes up one-third of the banking consumers in the U.S. This segment is the youngest and most diverse, comprising more races and ethnicities than any of the other segments. The consumers in this group are between 18-34 years old, have household incomes below $50,000 and have less than $25,000 in income producing assets.

Given their age and familiarity with modern technology, the Connected demographic is highly reliant on mobile devices to manage their finances. They value the speed and convenience of mobile banking, but they use banking call centers when they need personal interaction. During a recent Nielsen survey, 47 percent of the consumers in this segment said they had used mobile banking in the last month and 32 percent said they had contacted their bank's call center.

Traditionalists are at the other end of the spectrum, preferring to do their banking in branches because they value the safety of handling their finances in a physical location. The consumers in this demographic view branch banking as the most reliable way to ensure that their transactions are completed. They also don't fully trust mobile banking.

Channel Usage Varies by Segment

With a clear understanding of the different consumer banker segments, financial institutions can identify which channels appeal to them. For example, the Established segment is 6 percent more likely than the average consumer to have used their bank branch in the last month, whereas the Sophisticates are 33 percent more likely than average to use mobile banking. The Connected segment is 11 percent more likely than the average consumer to contact a call center, and Traditionalists are 4 percent more likely to use their local branch than the average consumer.

Methodology

The custom study was based on an online survey of U.S. consumer households in November 2013. The study included questions on channel usage, drivers of channel usage and barriers of channel usage.

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